[Industry Talk Time] McDonald’s CEO Talks China Market & Grimace Shake

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It was reported in several media sources this week that McDonald’s will raise its stake in its Chinese business sector, up from 20% ownership to 48% ownership, due to the McDonald’s bullish market prospects in China.

According to the press release, McDonald’s has agreed to acquire the additional stake from Carlyle, a global investment firm, as part of the American icon’s Accelerating the Arches strategy to expand the restaraunt franchise into global markets.

On the news of this deal, McDonald’s President and CEO Chris Kempczinski was very confident in the company’s decision to grow its market presence in China. Here’s what he said:

“China is now our second largest market; we’ve doubled our restaurants to more than 5,500 since 2017. We believe there is no better time to simplify our structure, given the tremendous opportunity to capture increased demand and further benefit from our fastest growing market’s long-term potential.”

A Reuters report notes that McDonald’s decison to increase its stake in its Chinese business bucks the trend of what other multi-national corporations are doing in the China market.

However, this move into the China market is just one part of McDonald’s strategy to grow in global markets.

For McDonald’s, international marketing is a key feature of the company’s success. McDonald’s launched its original “Accelerating the Arches” strategy in 2020. The first pillar of this strategy is to “Maximize our Marketing” followed by “Commit to the Core” and “Double Down on the Three D’s” — Digital, Delivery and Drive-Thru.

In order to accelerate international business growth and consumer acquisition, the Accelerating the Arches 2.0 strategic plan unveils how McDonald’s intends to carry out this acceleration through “Development” — the fourth D — by which the reorganization plan comes back into the discussion. By cutting jobs, the company can invest more in technology and digital marketing opportunities. This is essential to keep up with its international competitors, of which they could easily lose an advantage over the local consumer market preferences.

Apparently, this strategy is working quite well at its US fast-food chains, such as the Grimace Shake marketing campaign on social media.Don’t just take my word for it, that’s what McDonald’s CEO Chris Kempczinski told investors on the company’s conference call, too.

“This quarter, if I’m being honest, the theme was Grimace.”

This phenomenon has generated a lot of controversy in the public circles, since the famous McDonald’s mascot revealed himself to be dead after drinking the newest Grimace Shake from McDonald’s this summer. The video was originally posted through the company’s Instagram channel.

Needless to say, TikTokers were all over this marketing campaign, and it has been a massive success for McDonald’s strategy.

This [Industry Talk Time] is part of [The Weekend Brief] newsletter by Areas & Producers: A weekend guide to international issues and global markets.

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